Tax Law (Questions About Taxes)/Gift tax

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Question
Hi,
My question is that my parents bought a house and we were wanting to take it over.  They put 20 percent down on a 200k house wish is 40k.  So in order for us to take over we were going to buy it but it was going to be a gift equity meaning we would purchase the home for 200k and the 40k that they already put in the house they would gift the equity to us.  We are able to do that but the problem we are having is that is there a certain amount of money one can gift without being taxed or can my father gift my wife, myself , my son, and daughter separately? Would I be paying taxes or would he be paying taxes by gifting the 40k in equity to us? Please explain if you can.

Thank You

Answer
Hi,

If you give anyone more than $13000 this year you would be subject to gift tax.  If you are married and the giftee is married, you could each give them $13,000 per year without running into the gift tax.  I don't know the amount of the gift tax (I think it's about 55%) but most likely it would reduce the amount you can give during your lifetime and at death.

Regards,
Carole  

Tax Law (Questions About Taxes)

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Carole Dunton

Expertise

Preparation of individual income tax returns including social security, pensions, lump sum distributions, sale of personal residence, stock and mutual fund sales, distributions from individual retirement accounts, moving expenses and itemized deductions. General knowledge of schedule C for small sole proprietorships. No experience in corporate, estate, partnership or large business returns.

Experience

9 years as tax preparer for major national firm.

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